Lew’s first company, Wily Technology, was a classic garage-based tech startup (actually started in his living room in Santa Cruz) that grew from one person to 300+ people before being acquired by CA in 2006 for $375M. (Full disclosure: I worked for Wily as director of strategy from 2003 through the exit.)

After a year with CA and some time off to reflect, Lew started again, solving a similar business problem, but with a mission to hack out the massive cost of sales associated with most enterprise software. Lew points his team to the craftsmanship of the iPhone, and the friction-free design of Facebook and Twitter as models for New Relic’s enterprise offering, and in fact his lead investor is Peter Fenton of Benchmark Capital who also led a huge round for Twitter in 2009.

New Relic is now 2 years old and has over 4,200 customers*. Lew tells us that this approach eliminates as much as 80% of the delivery costs, and takes months out of the innovation cycle. Is the model sustainable? What kind of exits are available to SaaS-based enterprise software companies? What does this model mean to the future of enterprise software?

Check out Lew’s answers in this episode of Take 5: our conversation on leadership, technology, and product management.

* Errata: The audio uses the number of 40,000 websites; this was my error. Lew wrote me to clear this up: “We collect data on more than 40,000 JVM’s or Ruby Instances every minute, which does not correlate 1:1 with applications. (Many apps aggregate across multiple JVM’s or Ruby runtimes.) I use the 40,000 number to talk about the scale of the data we collect, rather than the size of our customer base. I don’t have up-to-date numbers on the number of actual apps we collect data on, but I would imagine that it’s over 5,000 since we have nearly 4200 production customers now and some of them have multiple apps (some have dozens in a single account). Anyway, just want to be sure we’re not over-representing ourselves.)”
Thanks Lew! Alan

Comments Off on Disruptive business model: Lew Cirne, serial entrepreneur on the future of Enterprise Software

Posted onMarch 23, 2010|Comments Off on If you love something, set it free

I’ve been looking for some new exercise routines, and came across two very interesting techniques: the 5×5 “strong lift“, and “Muscle Activation Technique” (MAT). These two both compete in a sea of different ideas for exercising … it’s a very competitive space.

But their web and information strategies are very different MAT is losing a huge potential market by holding on tight to its IP. Strong Lift is killing in the market by giving away the message for free.

Strong Lift 5×5 offers a fairly conventional strength training routine. They vary the workouts somewhat from the standard (5 sets of 5 reps each, rather than a few sets of 8, 10, or 12), and they have a way of increasing the weight systematically, and they start at a very low weight for several weeks. But Strong Lift isn’t very new. It should be boring.

MAT, by contrast, is a radical technique that offers non-linear improvements over time. The author discovered new science that can dramatically improve strength and range of motion with very little time and effort invested. It should be exciting.

But these two methods are marketed in very different ways. MAT is limiting its potential very substantially by using a conventional marketing model:

Little or no free information

Short videos that are promotional but have little value

You can’t get started with MAT without spending $80

MAT is focused on training teachers, not you and me … so they sell training courses for $400+

By contrast, the Strong Lifts 5×5 website gives a lot away for free:

Free eBook that gives away the technique, tells you how to do it

Blog with tons of free information

Daily email list with suggestions on how to get started

Which one is winning? I think MAT has the potential to revolutionize physical fitness. Strong Lifts is just another exercise regimen. But by giving away so much free content, Strong Lifts claims to be the #1 strength training website in the world, with readers from 180 countries.

Here’s a graph showing relative traffic on these sites.

Last month, stronglifts had 85,000 visitors, while MAT had 215.

Something tells me that MAT has a lot to learn about letting go of their idea … if you love something, set it free.

– Alan

PS: I’m such a fan of MAT that I’d love it if you all emailed them and told them what they’re missing! Here’s their email. And contact form.

The longer I live, the more I internalize it: We succeed or fail to a large extent because of our ability to establish and sustain good relationships. Yes, you need a strategy and need to be smart enough, but PMs need to be leaders. If no one is following you, you’re not a leader!

Think about your own career ups and downs. How many of failures are you blaming on others? And how many successes do you chalk up to your own brilliance? I suggest that you take a look inward and you’ll find the seeds of many of the problems you experience in the outside world.

My friend and colleague Michael Papanek has just launched a new blog covering topics that will help you in your career as a product manager. Michael specializes in strategies, skills and tools to implement change. Michael has taught me a ton about collaboration, leadership, and personal and organizational change. If you’d like a sample of his thinking, here are some articles to get you started:

Tom sums up the mistaken approach thusly: “It worked for us inside the firewall, so we never thought it’d have a problem outside the firewall”. Well put. He goes on to talk about the differences between enterprise collaboration and social networking, and some interesting observations about requirements for collaboration tools. Another quotable phrase: “not everyone is using collaboration tools to solve the same problem”.

My question is whether Google will learn key PM lessons from Buzz, or whether Buzz foreshadows an inside-out approach from Google that could severely limit the success of its future products.

PM guru Steve Johnson just posted his responses to the Red Canary Shop Talk Q&A. Great answers Steve! I love Steve’s interview question: “What’s your favorite MS Office app?” … the answer will tell you a lot about where your applicant is focused, in marketing, sales, or development! Check out Steve’s views on other topics, such as when should PM be hired at a startup, and a previously unannounced (?) book to be written some day by Steve.